Liberty Property (LRY) is a self-administered and self-managed real estate investment trust (REIT) that focuses primarily on prime suburban properties in the Southeast, Mid-Atlantic and Midwest regions of the United States. The company's portfolio comprises over 700 industrial and office properties, spanning 75 million square feet of space.

Office and industrial markets are weakening throughout the U.S. due to a faltering economy. Liberty Property has a large development pipeline that is only mildly pre-leased, which could be risky as we expect the economy to soften going into 2009. In the current environment, we do not favor suburban industrial/office companies as rental rates and occupancies will continue their downward trend.

Due to recent share price declines, the yield is now nearly 10%. Libert Property is only barely covering the payout with operating cash, so a cut could be coming if fundamentals continue to deteriorate. LRY will report 3Q earnings on today; We will update our recommendation after the earnings call on Tuesday.